Sunday, October 18, 2009

The Truth About Credit Cards

By: Laura Reginelli

It’s easy to see why so many people are sucked in to getting a credit card or even a retail store card. The discount on the initial purchase, the ability to buy now and pay later, it’s hard to ignore the allure that credit cards seem to bring.

Unlike in years past, credit cards allow you to buy what you desire at that moment instead of waiting till when you have the cash available. Furthermore, with the help of credit cards the online shopping industry has exploded. The realm of purchase possibilities has only expanded with the introduction of credit cards. Credit cards also help build your credit line which may help in the future when your credit reports are looked at when considering purchasing a home. An equally important benefit of credit cards is the fact that they give families some “wiggle-room” when they encounter emergency expenses.

All that glitters isn’t gold however and credit cards do have their drawbacks. Often times when people buy on credit they have the notion that the purchase is “free” even though they have to pay their bill sooner or later. When the bills start to pile up and you fail to pay them on time, credit cards tend to have a high cost to borrow. Ultimately this could lead to an increased amount of debt if you rack up overdue bills with high interest rates.

Like all things in life, it is important to consider both the benefits and disadvantages of signing up for a credit card before jumping into it. So if you feel that you can control your spending and be responsible with usage, a credit card may be the right payment choice for you!


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